Cash is king, and as the market goes, so are cash buyers according to Redfin as 31.9% of all transactions through its site were paid for without financing.
That number is up 29.9% from a year ago and is the highest figure recorded since 2014.
Cash-only home purchases plummeted during the outset of the pandemic, dropping to 20.1% in April 2020, a record low. But the current factors encouraging buyers to pay cash are different than they were a year ago.
“Today’s affluent homebuyers are motivated to pay in cash because the surge in mortgage rates makes them want to avoid loans—and the high monthly interest payments that come with them—altogether. Mortgage rates have declined in recent weeks but are still hovering above 6%,” said Redfin Economics Research Lead Chen Zhao. “During the pandemic housing boom, buyers were incentivized to pay in cash because of low rates, which drove up competition and made all-cash offers an effective bargaining chip for those who could afford them.”
All-cash home purchases increased in 29 of the 39 metros in Redfin’s analysis from October 2021 to October 2022. They increased most in Riverside, California, where they rose to 38% of all home sales from 19.2%. It’s followed by Cleveland (47%, up from 32%), Cincinnati (43.9%, up from 29.6%), Montgomery County, Pennsylvania (31.2%, up from 22.7%) and Philadelphia (37.1%, up from 29.4%).
All-cash purchases were most common in Florida in October. Jacksonville, where roughly half (49.7%) of homes were bought in cash in October, comes first, followed by West Palm Beach (48.6%). Next comes a pair of Ohio metros: Cleveland and Cincinnati, which are also on the list of places where cash purchases rose most. They’re followed by Atlanta, at 41.3%.
Expensive West Coast metros dominate the list of places with the lowest share of all cash-purchases. They’re least common in the Bay Area: Just 14.3% of home purchases in San Jose and 16.5% in Oakland were made in cash. Next come Seattle (19%), Los Angeles (19.2%) and Newark, New Jersey (20%).
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